InvestIdeas

The Financial Times revealed that the West’s Big Four accounting firms are abandoning many of their long-prized Chinese property developer clients due to the latter’s failure to file audited annual financial results by the deadline.

PwC, a Big Four accounting firm, is currently under investigation by Hong Kong authorities for its Evergrande audit. PwC and Deloitte, both headquartered in London, have resigned over the last three months as the auditors for, at minimum, five developers from China.

A US accounting watchdog found unacceptable deficiencies in audits of US-listed Chinese companies performed by KPMG in China and PricewaterhouseCoopers in Hong Kong.

The deficiencies were so great that auditors failed to obtain enough evidence to substantiate companies’ financial statements.

The firms, two of the so-called “Big Four” in global accounting, represent 40 per cent of the market share of US-listed companies audited by Hong Kong and mainland China firms.